Bond-market sell-off deepens fiscal cliff

Long-term Treasury yields remain around 4.8%-4.9% for the 10-year and roughly 5.25%-5.35% for the 30-year, with mortgage rates near 6.7%-6.8%. Strong auctions and Treasury's expanded $6 billion buyback show functioning markets, but yields remain elevated amid heavy issuance, deficits, inflation and oil risks, geopolitical uncertainty, term premiums, and competition from AI-related corporate borrowing. A proposed deferred-auction structure could reduce basis-trade and repo fragility, but it is untested and cannot solve the underlying refinancing burden.